The EOS Network Foundation (ENF) has encouraged EOS blockchain community members to reject a $22 million settlement from Block.one. It argues the claim doesn’t adequately compensate users for funds they lost due to Block.one’s “misrepresentations.”
Additionally, it points out that accepting the terms will deny victims future legal action against the company. The foundation says many refusals will send a strong statement.
ENF Claims $22 Million Settlement is Unjust After $4 Billion ICO
The final date for a response to the proposal is Aug. 29. Victims who fail to respond cannot pursue future legal action against Block.one.
Block.one established a $22 million fund it estimates will cover any ERC-20 and EOS tokens victims lost between June 26, 2017, and May 18, 2020.
According to the ENF, the company’s proposed settlement offer is unfair, considering it raised $4 billion through an initial coin offering (ICO). Block.one also didn’t invest $1 billion in the EOS network and its community as promised.
The company previously said it has no legal duty to fulfil its promise. Its shareholders received returns of over 6,000% during a buyback.
In a recent court case, New York Judge Analisa Torres ruled token sales to institutional investors for the purpose of raising funds constituted a securities offering. Tokens sold to retail investors via an exchange were not deemed securities.
EOS Blockchain Community Fights Back
Billing EOS as a genuine Layer 1 Ethereum competitor, Block.one rode the optimism surrounding decentralized finance to raise $4 billion. At the time, its ICO accounted for 25% of the 2017-2018 boom.
What exactly is an ICO? Dig deeper here.
However, instead of developing the chain, Block.one invested in a social media company, Voice, and centralized crypto exchange Bullish. The blockchain was also faulted for its lack of decentralization, poor governance, and lack of development activity.
In 2021, Yves La Rose founded the EOS Network Foundation to force Block.one to invest in development. The community eventually froze the founders’ token vesting contract and forked the blockchain code to make it open-source.
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